Ablrate is a peer lending platform which was founded in July 2014 to specialise in aviation related finance. Since then it’s expanded its remit to provide asset backed loans to a wider range of businesses. It is a relatively small platform with just over £16 million in completed loans, compared to something like Saving Stream with around £250 million or Funding Secure with £87 million. However, given the experience of the team in the aviation niche and the ability to access this type of financing, its definitely worth consideration for a diversified portfolio of P2P platforms.
Note: Review first written August 8th 2016, fully updated January 16th 2017
Expected Returns: 10% – 14% before bad debt
Provision Fund: No
Sell Out: Yes, secondary market.
Minimum Investment: None
Speed of Investment: Fast on secondary market, but not huge quantity of new loans.
What makes Ablrate different is the aviation niche and the flexibility of its secondary market. Looking down the list of staff members on the ‘about us’ page, 5 out of 6 have deep links to the aviation industry. Their PR and marketing manager even doubles up as an aircraft pilot when they need to transport aircraft from A to B!
The secondary market is the most flexible of any I’ve seen. It allows you to set up a completely custom bid or offer:
Other platforms only allow you to set up sale offers, either with a premium/discount or in many cases only at face value. This makes Ablrate’s much more of a natural market place. If I want to buy into a loan, but I’m not prepared to pay the given premiums, I can just set an order at what I feel it’s worth. Later if someone wants to sell out they have a list of buy orders to choose from and can gauge demand from what’s on the table. There’s no fees on the secondary market and you continue to accrue interest right up to the sale. Secondary market volume is quite strong at around £240,000 turnover per month (June 15 – Sep 16 average: source). The only downside of the secondary market is the lack of automatic matching. If I submit a bid at 100.1% when there’s already an offer at 99.9%, they’ll both sit on the page until someone else comes along and profits from the arbitrage. Once I was caught one of these arbitrages and probably made a cool £0.08 or so. This is a small gripe as overall the secondary market is excellent. Here is how it looks for a particular loan:
The yield column calculates your effective return based on the bid/offer price. Note that once you bid on a loan, your funds are tied up against that and you are not earning interest.
My AblRate Investing Experience
In the last 6 months of 2016 I made a 12.1% annualised return from AblRate. I feel like the loans are carefully chosen and negotiated by the AblRate team and given their smaller loan book I would hope they put more effort into dealing with bad debt and communication with borrowers. Many of the loans are amortising (they pay back some capital as well as interest each month). Repayments occur during the month, and you get an email from AblRate for each one. Rather than have loose change in my account I just log in from time to time and reinvest via the secondary market: I just take a glance down the secondary market list and choose one with a low bid/offer spread. New loans don’t come up that often, off the top of my head I would say about 2 or 3 new opportunities a month. New loans are usually “Instant Returns Enabled”, meaning you get paid interest from when you fund them, rather than when they are fully funded. There has only been one loan that went too fast for me to invest, usually there is availability for a few days.
You can deposit new funds by card payment. This speeds up investing time and, surprisingly, is a luxury not available on many other platforms who just take bank transfers.
There was one example that came up last September that was quite interesting. AblRate had lent to a Northern UK bar operator in June 2016 and was able to offer 14% interest to investors (compounding annually to 14.5%+). The same group then later offered a loan on CrowdStacker, a competitor P2P lending platform, for just 7% interest in September 2016. From what I understand, the Ablrate loan would have priority over the company assets in the event of a default (more info). I find it hard to understand why people have invested £2.5 million in the Crowdstacker loan at 7%, when they could easily buy the same loan at a 0.5% premium on AblRate’s secondary market.
Sometimes there are several sets of loans to the same borrowers. Fortunately, this is clearly listed within the website and on the secondary market list. If you want to maintain diversification its worth being extra careful to not over-lend to the same borrower or intermediary.
AblRate Review Summary
AblRate is a good platform, with higher rates. I like the fast money deposits via card payment, and I like the flexibility of the fee free secondary market. The speed of new lending opportunities is definitely on the slower side, but is this because the management team are extra careful in choosing who they lend to?
Ablrate Investor Reviews
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An excellent platform to do business with. Their actions build trust, their information stream via email first class. Yes there aren't many new loans but they're big enough to get your teeth into and the returns are incredible. As you say, they seem carefully sourced and the LTV ratio is generally reassuring. The secondary market is a little confusing to start with, but once you understand how it works is ease personified. Cash ISA? Pah! I have deducted a star because it is not offering an IFISA, which means it will probably become a secondary outlet for me in the future. It may not be their fault - officialdom seems very slow at granting IFISA approvals. But ablrate don't sound too excited about it anyway.